US Airways 2009 Annual Report Download - page 34

Table of Contents
unrealized losses on fuel hedging instruments. In addition, the 2008 period included $35 million of merger-related transition
expenses, $18 million in non-cash charges related to the decline in fair value of certain spare parts associated with our Boeing 737
aircraft fleet and, as a result of our capacity reductions, $14 million in aircraft costs and $9 million in severance charges.
The 2007 period included $187 million of net unrealized gains on fuel hedging instruments, $7 million in tax credits due to an IRS
rule change allowing us to recover certain fuel usage tax amounts for years 2003-2006, $9 million of insurance settlement proceeds
related to business interruption and property damages incurred as a result of Hurricane Katrina in 2005 and a $5 million Piedmont
pilot pension curtailment gain related to the FAA-mandated pilot retirement age change. These credits were offset by $99 million of
merger-related transition expenses, a $99 million charge for an increase to long-term disability obligations for US Airways' pilots as
a result of the FAA-mandated pilot retirement age change and $5 million in charges related to reduced flying from Pittsburgh.
The 2006 period included $131 million of merger-related transition expenses and $70 million of net unrealized losses on fuel
hedging instruments, offset by a $90 million gain associated with the return of equipment deposits upon forgiveness of a loan and
$14 million of gains associated with the settlement of bankruptcy claims.
The 2005 period included $28 million of merger-related transition expenses, a $27 million loss on the sale-leaseback of six Boeing
737-300 aircraft and two Boeing 757 aircraft, $7 million of power-by-the-hour program penalties associated with the return of
certain leased aircraft, $1 million of severance for terminated employees resulting from the merger, a $1 million charge related to
aircraft removed from service and a $50 million charge related to an amended Airbus purchase agreement, along with the write off
of $7 million in capitalized interest. The $50 million charge was paid by means of set-off against existing equipment purchase
deposits held by Airbus. The 2005 period also included $4 million of net unrealized gains on fuel hedging instruments.
(b) The 2009 period included $49 million in non-cash charges associated with the sale of 10 E190 aircraft and write off of related debt
discount and issuance costs, $10 million in other-than-temporary non-cash impairment charges for our investments in auction rate
securities and a $2 million non-cash asset impairment charge. In addition, the period included a tax benefit of $38 million. Of this
amount, $21 million was due to a non-cash income tax benefit related to gains recorded within other comprehensive income. In
addition, we recorded a $14 million tax benefit related to a legislation change allowing us to carry back 100% of 2008 Alternative
Minimum Tax liability ("AMT") net operating losses, resulting in the recovery of AMT amounts paid in prior years. We also
recognized a $3 million tax benefit related to the reversal of the deferred tax liability associated with the indefinite lived intangible
assets that were impaired during 2009.
The 2008 period included $214 million in other-than-temporary non-cash impairment charges for our investments in auction rate
securities as well as $7 million in write offs of debt discount and debt issuance costs in connection with the refinancing of certain
aircraft equipment notes and certain loan prepayments, offset by $8 million in gains on forgiveness of debt.
The 2007 period included an $18 million write off of debt issuance costs in connection with the refinancing of the $1.25 billion
senior secured credit facility with General Electric Capital Corporation ("GECC"), referred to as the GE loan, in March 2007 and
$10 million in other-than-temporary non-cash impairment charges for our investments in auction rate securities, offset by a
$17 million gain recognized on the sale of stock in ARINC Incorporated. In addition, the period also included a non-cash expense
for income taxes of $7 million related to the utilization of net operating loss carryforwards ("NOLs") acquired from US Airways.
The valuation allowance associated with these acquired NOLs was recognized as a reduction of goodwill rather than a reduction in
tax expense.
The 2006 period included a non-cash expense for income taxes of $85 million related to the utilization of NOLs acquired from US
Airways. In addition, the period included $6 million of prepayment penalties and $5 million in accelerated amortization of debt
issuance costs in connection with the refinancing of the loan previously guaranteed by the Air Transportation Stabilization Board
("ATSB") and two loans previously provided to AWA by GECC, $17 million in payments in connection with the inducement to
convert $70 million of US Airways Group's 7% Senior Convertible Notes to common stock and a $14 million
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